In the previous article about Bitcoin price trends at Coinidol.com, the experts have predicted that the price of Bitcoin could hit $3,000 by the end of December 2017. However, it’s June now and last week the Bitcoin price has already reached $3,000.
We contacted dozens of leading world experts in the field of cryptocurrency, among which are top managers of Global Advisors Bitcoin Investment Fund PLC, Gemini Exchange, BNP Paribas, Société Générale, Alphabit.Fund and many others.
We asked them to comment on the possible future of the Bitcoin price and whether we should expect a victorious continuation of Bitcoin’s price rise to $3,000 and above.
One of the main reasons for this year’s largest price rise is the official recognition of Bitcoin as a currency in Japan.
The Japanese cryptocurrency market is flourishing and other countries seem to be warming their attitude towards cryptocurrency use in society.
Daniel Masters, Director at Global Advisors Bitcoin Investment Fund PLC stated to Coinidol:
“Our stated target as of December 2015 has remained at $4,400 by year end 2017. I can say that there are obvious explanations behind this most recent price movement. Mainly, positive legislation out of Japan and Australia, and subsequent higher than expected trading volumes.”
Adam Norrie, Portfolio Manager and investment adviser at Bitstocks, a bitcoin investment company from London, said that currently, where the Bitcoin price is moving can be heavily attributed to a few reasons and also named Japan legitimizing Bitcoin as legal tender as the first reason for the Bitcoin price to grow. He stated:
“Japan legitimising Bitcoin as legal tender. This has been a huge step forward for Bitcoin and has now set the precedent for other countries to follow and has led to an influx of new capital entering the Bitcoin market.”
Juan J. Manini-Rios, CEO at SHA256 Trading S.A., a proprietary trading firm and market maker focused on developing and implementing algorithmic trading patterns in bitcoin markets, believes that there are several factors to consider that are driving this Bitcoin buying frenzy. He commented to Coinidol.com:
“During the last weeks there have been some very good news for Bitcoin of which worthwhile mentioning are the regulation of the cryptocurrency as an approved payment method in Japan and the resumption of withdrawals at the main Chinese exchanges. Additionally some jurisdictions that until last year were leaning towards a hard stance against cryptocurrencies are now looking much more friendly. Russia is a clear example of such situation with Vladimir Putin very recently meeting Ethereum co-creator Vitalik Buterin and so on. 2017 certainly presents itself as much more regulatory friendly compared to 2016 and earlier.”
Mark Dukas, Bitcoin and Blockchain Consultant, cryptocurrency trader at BitcoinSmartMoney.com, stated:
"Over the past few months we have seen great acceptance from Japan. Japan went through the "Lost Decade" in the 90's and early 2000's and has now become a pioneer for mainstream adoption. This allows people interested in alternative payment systems to use Bitcoin. This also fuels price increases due to the limited supply of coins in the ecosystem. When mainstream adoption is coupled with speculation we have tremendous price moves."
The Australian government has been planning to solve the problem of double taxation on cryptocurrency for several years. Finally, the Australian government decided to drop the goods and services tax (GST) on digital currency purchases, including Bitcoin, starting in July 2017.
Jonathan Millet, Bitcoin Investor, CEO of NEWSBTC, points out the importance of this decision:
“Cut of double tax on btc in Australia, legalization and increased use and investment in Japan, more funds going to crypto in general and much talk of scaling by end of 2017. Next 7 months if scaling progresses then 4 months plus. Australia set to implement very soon while Japan also expect to cut purchase tax in July”
Cryptocurrency traders are expecting another wave in Bitcoin price rise by the beginning of July, while the Australian blockchain and Bitcoin-related businesses that have relocated abroad will probably now considers the possibility of returning home.
The emergence of the ICOs on the market makes the cryptocurrency investment industry stronger. The whole cryptocurrency market cap has already surpassed $100 billion USD and keeps growing.
Adam Norrie stated to Coinidol.com that new money entering the industry is also a reason for the Bitcoin price to continue growing. He said:
“We can chart this due to the fact that cryptocurrencies, in general, have grown in regards to their market caps and that this has not impacted the Bitcoin price at all in a negative way but rather shows how as a collective the space is growing.”
Malcolm Pallé, Managing Director at MiningMaven and Non-Executive Director at Coinsilium, also commented:
“Such fluctuations are not unusual when a new asset class is created. Whale Oil went from zero to a war time peak if $67.2 a barrel on 1864 as new use cases were discovered in lighting, lubrication and more. Better people look in the direction of the fundamental drivers for the exponential growth in cryptocurrency adoption and usage if they want to make some sense of the current speculative noise. A good starting point would be the new funding paradigm with ICOs which is driving huge numbers of new adopters into the space.”
Daniel Masters noted:
“I believe we are witnessing the emergence of a new use case for digital assets, bitcoin included. Since 2009 and the inception of bitcoin, the perception has been that digital assets initially could solve problem associated with currency. With the advent of private blockchains, we began to see the emergence of the solutions built for problems in trading and settlement. Now, with the emergence of a vibrant ICO market, we have moved to a new phase where digital assets can solve problems in capital formation.”
Juan J. Manini-Rios, also stated:
“We must consider that right now Bitcoin is less than 50% of the total market capitalization of cryptocurrencies. There is much more going on in the blockchain assets space that just bitcoin. This means that it is now possible to invest money in this asset class with some degree of diversification which of course is very helpful for big investors that want to capture the return of the sector while hedging idiosyncratic risks of each specific coin. Furthermore crypto derivatives markets are slowly becoming a reality which adds another dimension to the potential investment and trading strategies that can be implemented. Crypto is now much more than just Bitcoin and that makes the class more interesting to professional traders and investors.”
In February, the PBOC have intervened to block margin-based and zero-fee Bitcoin Trading and imposed inspections on the local exchanges. Soon after, several cryptocurrency exchanges suspended withdrawals in USD. As we reported before, starting April 2017, customers of one of the largest cryptocurrency exchanges, Bitfinex, were unable to withdraw their Bitcoin to fiat due to problems with the Taiwan banks that the crypto exchange is moving customers funds through. Soon after, OKCoin.cn and several other Chinese cryptocurrency exchanges have sent a message to its users stating that starting from April 18, 2017, they were temporarily suspending USD deposits.
However, in June, major cryptocurrency exchanges started to resume allowing withdrawals.
Adam Norrie noted that this fact is driving the Bitcoin price today as well. He commented to Coinidol.com:
“Finally, a more recent event is that Chinese exchanges have resumed Bitcoin withdrawals and therefore trading confidence in the region has begun to grow again and has therefore positively impacted the price.”
The above-mentioned reasons work on the popularization of Bitcoin in the world. As more people know about the advantages of the currency of a new era, the faster it goes mainstream.
Dell Jensen, a Bitcoin Mining developer and Trader, commented:
“We're still in the early adoption phase, so the main public acceptance jumps will take place soon. It's only just begun though. By 2018, I believe Bitcoin price will hit $4-5K due to barriers breaking down, this process is exponential.”
Mark Dukas points out that Bitcoin is spreading to new countries and into the hands of new investors and users:
“Emerging markets are hot right now with investor money pouring in at a rapid rate during the first half of 2017. Bitcoin has real use cases in emerging markets such as Brazil and India. With that you will see more and more people flocking to it. An estimated 2,500 people in India are investing in Bitcoin every single day despite RBI warnings.”
From another side, the recent price fluctuation is often associated by experts with speculation on the cryptocurrency markets, especially by the Chinese, and a bubble inflated by exchanges.
Joël Hubert, Software engineer at Otonomos, a Blockchain-enabled company governance processes with Ethereum, said:
“We are seeing a new wave of speculators enter the arena: I would generally typify them as friends and acquaintances of those that were previously invested in crypto and now want to join the "fun". It's a decently sized "word of mouth" expansion of the old crypto trader circle. The newbies are not particularly knowledgeable about the topic ("dumb money") and will be laughing one moment and crying the next when this bull market ends. I think we may see BTC prices up to 5000 this summer - some have even called for $10,000 but that appears a bit of a stretch. Anything in that range is plausible though! The effects have spilled far beyond Bitcoin into the altcoin market; you can take any alt chart and will find a few parabolic moves in recent times.”
Daniel Kim, Sales and Trading at SFOX, an enterprise-grade trading platform with algorithmic trading tools for businesses and traders to buy and sell bitcoins, former Director of Institutional Sales at Gemini Exchange and assistant of Vice President at BNP Paribas, expects high volatility because of the new investors and speculators entering the market. He said:
"Asia continues to lead the gain but US is not too far behind. The exponential gains in digital currency investment has put digital currency in the spot light, driving interest from new investors and speculators; I foresee over the next seven months we expect high volatility in all digital currencies."
Mattia Rizzi, electronic trading and blockchain expert at Société Générale Corporate and Investment Banking, sharing his personal views, said that what we see now is a bubble, when the more price rises the more people want to buy, hence the quick rise to $3,000.
“In the next few months we will break over $3,000 and likely reach $4,000. Lots of buying volume coming in, more mainstream people looking to buy in. Obviously we need to factor whether on August 1 a Bitcoin HF will be implemented, if that is the case it could bring the price down around $1,200-1,500 in my opinion. However that seems unlikely to happen.”
Daniel Masters noted that beyond this, we are seeing increasing demand from an ever-expanding group of investors who see bitcoin as a useful hedge/allocation when building their portfolio. He continued:
“This trend was expected, but I believe it hit mainstream sooner than many predicted. For instance, the NASDAQ OMX listed bitcoin ETN offered by XBT Provider AB (“XBT”) (and guaranteed by Global Advisors) has seen its assets under management more than double since January to $100m; and last week saw the announcement that the UK’s largest broker now offers the ETN via their online platform making XBT available for placement in tax advantaged, SIPP, retirement accounts.”
Stelian Balta, Founder of HyperChain Capital, a Singapore-based digital assets hedge fund targeting Blockchain enabled technology companies, stated:
“I think the increase of price is because the new institutional money are coming to the ecosystem. Not only bitcoin price is up, all major digital assets are up. Having achieved $100bn marketcap, new interest will come from institutional investors, hedge funds, etc.”
Nathan Lands, Co-Founder and CEO at Binded, a company developer of copyright ownership platform, that helps artists to manage their copyrights, using the blockchain of Bitcoin to create a permanent record for proof of publication, commented:
"I think it's primarily driven by the fact that bitcoin has shown to be more resilient than expected(no major crashes or technical issues) as well as increasing interest by major corporations and investors. I suspect many big players are slowly dipping in and testing the waters. Price will likely go up, possibly a lot."
Alexis Roussel, CoFounder at Bity, a Crypto-Currency broker in Switzerland, trading with bitcoins and ethers, and managing a network of Bitcoin ATMs, commented:
“The price of bitcoin and ether have still a lot of space to grow, as the inflated assets from the old economy are moving into the crypto economy. If you want to invest in some project that make sense in our new digital economy, they will only accept cryptocurrencies as a means of payment. Expect major shift of assets. expect majors movement of prices.
Expect major crackdown on the crypto economy that will fuel its price rise. And this is still not the mass adoption phase. That will come later."
Mattia Rizzi noted that increased blockchain interest from financial services firms attracted investors into buying cryptocurrencies (Santander, JP Morgan Quorum). However, he also believes that a number of family offices and hedge funds in the United States that have started to invest small parts of their portfolios in Bitcoin is also an important reason for cryptocurrency price to grow.
Mark Dukas also stated:
“The speculative market is a driving force creating these parabolic moves. We have newbies, traders and wealthy individuals who are now experiencing FOMO (Fear of Missing Out). My belief is price growth will continue with Bitcoin having actual uses cases. It provides value for those in need and tops it off by being the greatest digital asset ever created.”
Liam Robertson, CEO of Alphabit.Fund, the first regulated crypto fund in the world, also stated that the bullish price continuum running up to $3,000 is indicative of new capital entering the market, and in general a higher grade of cryptographic currency acceptance within the wider investment community. He stated to Coinidol.com:
“Anyone who says with any conviction that the price is going to be higher or lower than those levels in seven months is pretending to know the answer. 15-30% price swings are all part of the fun with bitcoin, and could happen at any time. One thing I would say however, is that it is my belief that bitcoin will hit $10,000, and sooner than 2020.”
The technology standing behind the Bitcoin – Blockchain – is now more and more used in different management and governance fields. New Blockchain-based projects are entering the market worldwide every week. However, the acceptance and understanding of new financial technologies is impossible without reports in mass medias. This also works in favor of Bitcoin.
Juan J. Manini-Rios noted that recently there has been a massive media frenzy around bitcoin, particularly following the currency setting a new all-time high. He continued:
“This year bitcoin and ethereum have been portrayed multiple times in specialized finance media outlets like CNBC, Bloomberg, Forbes as well as general news outlets worldwide. I’m pretty sure that most old time bitcoiners are constantly receiving messages from family and friends wanting to jump in. The amount of people interested in investing in bitcoin and cryptocurrencies is growing dramatically and there are several indicators to support this claim. Data from Google searches as well as account number growth at main exchanges like Poloniex, GDAX (Coinbase), Kraken and so forth. Most of these exchanges are really struggling to keep up with the rate of growth some even experiencing periods of serious service degradation.”
Mattia Rizzi said to Coinidol that among the reasons of the Bitcoin price that we observe now is increased mining difficulty. To date, the mining difficulty has already surpassed 700,000,000,000 and continues growing.
Vladimir Lialine, the founder of Twixsoft, a Bitcoin Mining and Trading company, developer of Blockchain-based solutions for banking, the founder of Honeypotz, and a solution developer of Blockchain digital assets integrity verification “Everexpay”, an Ethereum powered P2P money transfer software wallet. He also pointed out that Bitcoin mining difficulty has gone up tremendously and miners have to be compensated for processing transactions.
He also commented that the price will continue growing and there are 10 reasons for that:
“#1 Reason illiquidity, price discovery is very opaque
#2 Japan's quick adaptation of BitCoin for store payments
#3 Major uptrend in Blockchain and Cryptocurrencies
#4 Bitcoin is a benchmark
#5 Bitcoin is going mainstream
#6 Mining difficulty has gone up tremendously, miners have to be compensated for processing transactions
#7 Volatility is here to stay
#8 Major uptrend with severe drops/pullbacks
#9 Limited supply
#10 Network congestions”